Study: 62% of Americans May Be Missing Out on Car Insurance Savings

When the COVID-19 pandemic hit the United States in 2020, many companies shifted to having employees work from home.

With countless people staying home and far fewer cars on the road, many carriers issued premium refunds to customers. Car insurance rates also dropped by nearly 4%—the first decline since 2013.

As the U.S. opens back up and people return to the office (as well as many other places besides the homes they’ve been stuck in for the past year), auto insurance rates are going back up.

With all of this change in the industry, we wanted to gauge if consumers are happy with the cost of their car insurance, how often they shop around for better rates, and what they value the most when it comes to policies and companies.

To do so, we surveyed 1,000 American adults, asking them these questions and more. We also broke the results down by age to see what Gen Z, Millennials, and other generations think about auto insurance.

Key Findings

  • 49% of all respondents think they pay too much for car insurance, including 58% of Millennials, but…
  • 40% of respondents only shop for better rates every few years while 22% never shop for better rates.
    • 57% of Millennial respondents never shop for better car insurance rates (16%) or shop only once every few years (41%).
    • 76% of Gen Z respondents never shop for better car insurance rates (32%) or do so only once every few years (44%).
  • 36% of respondents never switch car insurance companies while another 41% only switch every few years.
  • 26% of Gen Z think it’s unfair for state governments to require car insurance and 30% wouldn’t pay for it if it wasn’t required.
  • The most popular way consumers shop for car insurance is by using an online comparison site (42% of respondents), followed by going directly to insurance companies’ sites (27%), and talking to an agent of a specific provider (19%).
  • 38% of respondents only pay for the state-mandated minimum car insurance coverage while another 43% only pay slightly more than the required amount.
  • Consumers value customer service the most when it comes to car insurance (90% saying it’s important), followed closely by coverage (88%), and cost (87%).
  • Consumers are more likely to buy car insurance from a company they’ve seen advertisements for, including 70% of Gen Z respondents, 68% of Millennials, and 63% of Gen X.

Nearly half think they pay too much in car insurance, but over 60% never or rarely shop for better rates

We started off by asking our respondents if they are currently paying for car insurance—73% of which were.

We then asked this group how much they currently pay monthly for car insurance. On average, respondents pay $215, while the median amount is $133.

Unsurprisingly, younger people pay more each month, with the generational breakdown being as follows:

  • Gen Z – Average: $270, Median: $208
  • Millennials – Average: $228, Median: $133
  • Gen X – Average: $189, Median: $125
  • Baby Boomers & Up – Average: $135, Median: $100

We next asked this group of respondents whether they thought they paid too much for auto insurance.

As shown in the graphic, 49% think they are paying too much while another 19% are unsure. Over half of Millennials (58%) think they are paying too much, followed closely behind by Gen X (54%).

Surprisingly, the generation with the smallest proportion of respondents saying they pay too much is Gen Z (39%). Perhaps this group understands that insurance costs more for young adults with less driving experience or maybe they haven’t experienced the inflation of car insurance rates like older generations have, giving them less of a frame of reference for what is “expensive.”

With nearly half of respondents saying they think they pay too much, it would make sense that they are regularly shopping around for better rates, right?

Not quite.

As shown, nearly two-thirds either only shop for better car insurance rates once every few years (40%) or never (22%).

The results are similar for our question about how often people switch car insurance companies:

The vast majority of respondents, 77%, only switch companies every few years (41%) or never (36%).

While some insurers provide loyalty discounts for sticking around, these are often offset by larger premium increases.

Experts recommend shopping for better rates every six to 12 months. Carriers often change their underwriting criteria, meaning you may qualify for a better rate than you did in the past. Some also provide discounts for your first policy term which can lead to significant savings.

According to our survey, many consumers are unhappy with their car insurance costs but aren’t putting in the effort to save money. 62% may be missing out on savings by not regularly shopping for better rates.

Nearly 40% only pay for state-mandated minimum coverage; 21% wouldn’t pay at all if not required

Each state other than Virginia and New Hampshire has minimum car insurance requirements that drivers must meet.

We next wanted to see whether consumers are simply paying for the minimum coverage or if they are opting for more protection:

As shown above, 38% of respondents only pay for the required coverage in their states. An additional 43% pay just slightly more than the state-mandated minimums.

While minimum coverage has the cheapest monthly premiums, consumers may be left with a hefty bill if they get in an accident, especially if they are at fault.

While on the topic of state-mandated insurance requirements, we also asked our respondents if they thought it was fair for state governments to require car insurance:

The majority of respondents (60%) think it’s fair for governments to require car insurance. These requirements protect other drivers and yourself in the event of a car accident—especially if there are injuries involved.

According to our results, much of Gen Z may not fully understand the value of car insurance, as only 34% think states requiring it is fair.

This is further supported by our next question that asked respondents whether they would pay for car insurance if it wasn’t required:

Overall, about one out of five respondents wouldn’t pay for car insurance if it wasn’t required. The results are relatively consistent for Millennials, Gen X, and Baby Boomers and up.

30% of Gen Z respondents, however, indicated that they wouldn’t pay if they didn’t have to while another 28% are unsure.

Many of these Gen Z drivers may have not gotten into an accident yet, making car insurance seem like a waste. Older drivers likely have gotten into more accidents in which their or the other involved parties’ car insurance has covered repair costs and medical bills—helping drive home the value of having coverage.

On top of asking what consumers think about car insurance costs, we also wanted to figure out how they shop for policies:

The plurality of respondents, 42%, primarily use online comparison sites to shop for car insurance.

Over the past decade, a number of these sites have been created, many of which allow consumers to directly compare real quotes from multiple carriers in just a few minutes, saving them time and money.

After comparison sites, the next most popular form of shopping is going directly to insurance companies’ sites (27%), followed by talking to an agent for a specific company (19%), and talking to a broker working with multiple companies (9%).

Interestingly, perhaps the most tech-savvy generation, Gen Z, use comparison sites much less often than other generations, with only 31% responding that it is their primary form of shopping. Instead, it seems that much of this group talks directly to agents for specific companies (32%). A lot of these young adults may be simply going with the car insurance company that their parents use since they aren’t as familiar with how insurance works and what to look for.

Customer service narrowly edges out cost & coverage as the most important aspect of car insurance

So we know how consumers shop for car insurance, but what do they look for in companies and policies?

Our next question asked respondents how much they valued various aspects of car insurance:

The above graphic shows the proportion of respondents that either answered “very important” or “somewhat important” to each aspect of car insurance.

Customer service (90%) narrowly edged out coverage (88%) and cost (87%) as the most important aspect for policyholders.

J.D. Power’s 2021 Auto Insurance Study found that there were significant declines in how satisfied customers were with the ease of communicating with their insurers, including online (email and live chat), by phone, and with local agents.

Having the best policies for the cheapest prices doesn’t seem to be sufficient for most customers; they expect exceptional customer service that is readily available when needed.

You can also see the full results of this question, broken out by all available answers, below:

58% say advertisements influence which insurer they choose

It seems there isn’t a single commercial break nowadays without a whacky advertisement for car insurance (see Flo from Progressive, the GEICO Gecko, and the LiMu Emu from Liberty Mutual).

We were curious whether these often-memorable commercials influenced consumers when it comes time to choose a carrier:

Over half of the respondents, 58%, either said that they were “much more likely” (28%) or “somewhat more likely” (30%) to purchase a policy from a company they’ve seen advertisements for.

Younger generations, especially, are more likely to go with insurers they’ve seen advertisements for, with 70% of Gen Z and 68% of Millennials responding as such.

The Baby Boomers and older group indicated that they are the least affected by ads with only 39% saying they influence their buying decisions. These older consumers may already have formed opinions about which companies are good or may not respond as well to the often goofy commercials that car insurance companies run.

Consumer brand recognition of major car insurance companies

Our final question asked respondents how well they recognize 11 of the largest car insurance companies:

The above chart shows what proportion of respondents said they recognize each company “very well.” Other options included “somewhat well” and “not at all.”

Unsurprisingly, the five most recognizable brands are also the five that spend the most on ads. GEICO, for example, spent $1.6 billion on ads in 2019.

The results of our survey indicate that this ad spend may be worthwhile, especially when considering that the majority of respondents say their buying decisions are influenced by advertisements.

One other interesting note about this question is that Gen Z respondents, as a whole, recognize car insurance brands less often than other generations. Insurers that effectively advertise to this younger generation may have the upper hand in securing customers early in their driving careers.

Full Survey Results

  1. Which of the following best describes you?
  • I currently have a car and pay for car insurance – 73%
  • I currently have a car but do not have car insurance – 11%
  • I currently do not have a car – 16%
  1. How much do you currently pay for car insurance each month? (Asked only to those with car insurance)
  • The average amount paid was $215.28
  • The median amount paid was $133.00
  1. Do you think you pay too much for car insurance? (Asked only to those with car insurance)
  • Yes – 49%
  • No – 32%
  • Neutral/Unsure – 19%
  1. How often do you shop around for better car insurance rates? (Asked only to those with car insurance)
  • Multiple times a year – 15%
  • Every year – 23%
  • Once every few years – 40%
  • Never – 22%
  1. How often do you switch your car insurance company? (Asked only to those with car insurance)
  • Multiple times a year – 8%
  • Every year – 14%
  • Once every few years – 41%
  • Never – 36%
  1. How do you primarily shop for car insurance? (Asked only to those with car insurance)
  • Use online car insurance comparison sites – 42%
  • Go directly to the websites of car insurance companies – 27%
  • Talk to local insurance agents that work for a specific car insurance company – 19%
  • Talk to local insurance brokers that don’t work for a specific car insurance company – 9%
  • Other – 3%
  1. How well do you understand how your car insurance policy works? (Asked only to those with car insurance)
  • I fully understand it – 24%
  • I understand it pretty well – 36%
  • I understand it a little bit – 31%
  • I don’t understand it at all – 8%
  1. Do you think it’s fair for state governments to require car insurance? (Asked only to those with car insurance)
  • Yes – 60%
  • No – 15%
  • Neutral/Unsure – 26%
  1. If you weren’t required to pay for car insurance, would you still pay? (Asked only to those with car insurance)
  • Yes – 59%
  • No – 21%
  • Neutral/Unsure – 20%
  1. Which of the following best describes how you choose your amount of car insurance coverage? (Asked only to those with car insurance)
  • I just meet the state-mandated minimum coverage amounts – 38%
  • I pay for slightly more than the state-mandated minimum coverage amounts – 43%
  • I pay for much more than the state-mandated minimum coverage amounts – 19%
  1. How would you rate each of the following in terms of importance when it comes to choosing a car insurance policy? (Asked only to those with car insurance)

  1. Are you more likely to choose a car insurance company that you’ve seen advertisements for (on TV, online, etc.)?
  • Yes, much more likely – 28%
  • Yes, somewhat more likely – 30%
  • Neutral/Unsure – 21%
  • No, it doesn’t affect my decision – 21%
  1. Do you value the following more or less than having good car insurance coverage? (Asked only to those with car insurance)

  1. How well do you recognize the following car insurance companies?

Methodology

All data found within this report come from a survey commissioned by Expertise.com and conducted online by survey platform Pollfish on July 13, 2021. In total, 1,000 adult Americans were surveyed. Results were post-stratified by age and gender to better match the demographics of the United States. For this study, we considered those ages 18 to 24 as Gen Z, 25 to 44 as Millennials, 45 to 54 as Gen X, and 54 and up as “Baby Boomers and up.” The generational names we used for Pollfish’s provided age ranges most closely match the Census Bureau’s age range for each generation.